Renault says will cut 7,500 French jobs by 2016

Renault’s French workforce currently stands at 44,642, making the job cuts equivalent to a 17% reduction in staff numbers. Photo: Reuters

Updated: Wed, Jan 16 2013. 02 02 PM IST

Paris:Renault SA announced plans on Tuesday to cut its staff in the country by 7,500 workers to become more competitive and prepare for the hiring of others with specific skills.

Renault said it would shed 5,700 jobs by 2016 through natural attrition. Subject to an agreement with the unions, most would come from the extension of an early retirement programme to all employees due to retire in three year’s time, subject to an agreement with unions.

“If an agreement is signed with unions, this staff redeployment would require neither a plant closure nor a voluntary redundancy programme,” said Gerard Leclercq, head of Renault’s French operations.

Renault’s French workforce currently stands at 44,642, making the job cuts equivalent to a 17% reduction in staff numbers.

The cuts would save the auto maker around €400 million ($534 million) in fixed costs, giving it “room for investment and to develop its activities,” the statement said.

A “staff redeployment” would allow it to then “make recruitments based on critical skills,” the company added, though it did not say how many workers might be hired, nor what skills were needed.

“On the basis of a progressive recovery of the European market, establishing such an agreement would allow for growth in French output that is more sustained than that of the European market” as a whole, the company forecast.

It has already reached a similar deal with workers in Spain, adjusting working conditions and pay in exchange for maintaining jobs, a trend established several years ago in Germany that is catching on elsewhere in Europe.

Last year, the leading French auto maker PSA Peugeot Citroen said it would eliminate 8,000 jobs and close an iconic plant in Aulnay-sous-Bois, north of Paris.

Elsewhere in Europe, Ford Motor Co., Ford Motor Co., General Motors Co. and its German brand Opel have also been forced to close factories or lay off workers, as sales across the continent fell to 11 million vehicles in the first 11 months of 2012, the lowest level since 1993.

Ford anticipates losses of $1.5 billion in Europe for 2012, while GM has estimated the figure at $1.5-1.8 billion.

Fiat boss Sergio Marchionne estimated at the Detroit auto show that European auto makers lost between €4-5 billion last year, noting: “No one is making money.”

Renault boss Carlos Ghosn told AFP in an interview in Detroit that “by improving competitiveness in France and at other sites, Renault will become more attractive and its partners could give it more work.”

Renault and the Japanese group Nissan Motors are already part of a alliance, and the French company also has cooperation agreements with the German auto maker Daimler AG , which owns Mercedes-Benz.